Housing Cost Burden
Contents
Housing Cost Burden
The American Community Survey (ACS) is the primary source for computing housing cost burden in the United States. The Census Bureau collects the necessary data through this survey, and it's used by a wide range of organizations to produce their own analyses.
How to Compute Housing Cost Burden Using ACS Data
To calculate housing cost burden, you need two key pieces of information for each household: gross monthly housing costs and gross monthly household income.
1. Identify the ACS Variables
The ACS Public Use Microdata Sample (PUMS) and detailed tables provide the variables needed for this calculation. The Census Bureau has already computed tables for housing cost burden.
However, if you want to perform a custom analysis or use the microdata (PUMS files), you'll need these variables:
| • | For Renters: |
| o | Gross Rent (GRNTP): This variable includes the contract rent plus the estimated average monthly cost of utilities (electricity, gas, water, and fuel) and fuels. This is the correct variable to use for renter housing costs, as it captures a more complete picture than just contract rent. |
| o | Household Income (HINCP): The sum of the incomes of all household members. |
| • | For Owners: |
| o | Selected Monthly Owner Costs (SMOCP): This variable is the owner's equivalent to gross rent. It includes the sum of monthly payments for: |
| ▪ | Mortgage principal and interest |
| ▪ | Real estate taxes |
| ▪ | Fire, hazard, and flood insurance |
| ▪ | Utilities (electricity, gas, and water) |
| ▪ | Condominium fees |
| ▪ | Mobile home costs and site rent |
| o | Household Income (HINCP): The sum of the incomes of all household members. |
2. The Calculation Formula
Once you have the necessary variables, the calculation is straightforward. For each household, you compute the housing cost-to-income ratio:
Ratio=Monthly Household IncomeMonthly Housing Costs​×100
| • | For a renter: Ratio = (GRNTP / HINCP) * 100 |
| • | For an owner: Ratio = (SMOCP / HINCP) * 100 |
3. Handling Special Cases
There are some important considerations when using ACS data for this calculation:
| • | Negative or Zero Income: Households with zero or negative income (due to business losses, etc.) are typically considered to be severely housing cost-burdened by default, as their housing costs cannot be covered by their income. |
| • | Zero Housing Costs: Households that do not pay cash rent or have no mortgage are not considered to be cost-burdened. Their ratio is not calculated or is considered to be zero. |
| • | Data Caveats: The ACS variables are estimates based on a sample of the population, so they come with margins of error. It is important to account for these margins of error in any final analysis to ensure statistical accuracy. |
The Census Bureau publishes tables that have already performed these calculations. For example, tables starting with B25106 for renters and B25107 for owners provide the counts of households within different housing cost-to-income ratio categories (e.g., less than 10%, 10-14.9%, 30-34.9%, 50% or more). In the Demographic Profiles, the pre-computed values are shown in the Housing Profile as H110 (owner) and H126 (renter).